|
Updated 08-Feb-10
Quotes at time of story, top stories today:
Economic and Fed Speaker Summary
Economic and Fed Speaker Summary:
There was no economic data released this morning.
Central Bank/Treasury Speaker Summary: Reuters reports that the Federal Reserve could begin to sell off assets later this year and should try to get its balance sheet down to a normal size before the next recession strikes, a senior Federal Reserve official said on Monday. "Maybe you get in the second half of 2010 or something like that, if things are going pretty well, maybe then you'd sell a little bit at that point and you'd try to see how the market reacts," St. Louis Federal Reserve Bank President James Bullard told Reuters in an interview. The Fed will come to the end of its purchase of $1.25 trillion worth of mortgage-backed securities at the end of March. As the U.S. economy's recovery gains traction, the Fed may need to reduce the assets it holds on its balance sheet to prevent inflation from taking off.
Upcoming economic data: Look for Wholesale Inventories data to be released tomorrow morning at 10:00 ET.
Upcoming Central Bank/Treasury Speech: Look for New York Fed President Dudley to speak at the Reserve Bank of Australia's 50th Anniversary Symposium at 19:20 ET.
Sector Summary: Consumer Discretionary
Sector Summary: S&P Consumer Discretionary Index +0.4% outperforming the broader market
The consumer discretionary group is outperforming the broader market. The
retail group is seeing notable strength with little news/earnings out in
individual names. Currently the Retail HOLDRS Trust (RTH) is up 0.9%, SPDR S&P
Retail ETF (XRT) is up 0.3% but the S&P Retail (RLX) is up 1.1%.
The construction/homebuilding sector is getting a boost with the SPDR
Homebuilders (XHB +1.9%) following WSJ article saying that fewer write-downs and
new-home order cancellations along with improved order rates are some of the
most positive signs from home builders. Standard Pacific (SPF +5.4%), Beazer
Homes (BZH +5.1%), KB Home (KBH +4.1%), MDC Holdings (MDC +3.3%), Hovnanian
Entrpr (HOV +3.1%), Ryland Group (RYL +2.1%), Lennar (LEN +2.0%), DR Horton (DHI
+2.0%), Meritage Homes (MTH +1.9%)Toll Brothers (TOL +1.5%), are all trading
higher... Home improvement names are also higher following analyst commentary.
Morgan Stanley upgraded Home Depot (HD +2.4%) to Overweight from Equal-weight
and sets a $35 tgt... FBR Capital Mkts said that lumber price increases
accelerating and it expects Home Depot and Lowe's (LOW +1.4%) to see benefits to
comps.
Auto related names are mixed with multiple news items out. Toyota Motor (TM
-1.3%) is under pressure again after NY Times reported that Toyota Motor is
expected to add 2010 Prius to recalls. Honda Motor (HMC -1.8%) is also lower...
On the upside, Citigroup upgraded AutoZone (AZO +2.0%) to Buy from Hold and
raises their tgt to $188. Other names trading higher include: American Axle (AXL
+4.6%), Ford Motor (F +2.0%), CarMax (KMX +1.2%), Brooks Automation (BRKS
+1.1%).
Other notable mentions: MGM Mirage (MGM flat) announced the launch of credit
facility amendment and extension transaction... Leaders: Motor homes
manufacturer Winnebago Industries (WGO +9.1%) was upgraded at Baird to Neutral
from Underperform. Peer Thor Industries (THO +1.0%) is also trading slightly
higher. Deer Consumer Products (DEER +5.9%) raised its FY10 revenue and net
income guidance... CVS Caremark (CVS +5.3%) is seeing strength following Q4
earnings, Q1 and FY10 guidance. Walgreens (WAG +1.2%) is also higher... Morgan
Stanley upgraded Newell Rubbermaid (NWL +2.0%) to Overweight from Equal
Weight... Susquehanna upgraded Priceline.com (PCLN +1.1%) to Positive from
Neutral... JP Morgan upgraded Disney (DIS +0.9%) to Neutral from
Underweight...BMO Capital upgraded Nordstrom (JWN +0.7%) to Market Perform from
Underperform.
Morning Commodities Update: Crude Flat
Monday morning commodities update:
Energy: March crude oil ($71.26 +$0.07) is trading near the flat line this morning, after giving back its overnight gains. It put in highs at $72.39 in overnight trade, but quickly gave back those gains to trade towards the unchanged line. March natural gas ($5.598 +$0.083) is extending its recent rally to a third consecutive session this morning and is trading just below its best levels at $5.679.
Metals: April gold ($1065.90 +$13.10) and March silver ($15.035 +$0.205) are recouping their losses from Friday's leg lower. Both metals rallied to their best levels, at $1074.30 and $15.32, in overnight trade as the dollar index dropped to its worst levels. The dollar has since bounced off those lows to recoup some of its losses and that bounce has caused gold and silver to pull back from their highs. Heading into the open of the equity markets, both metals are trading around their lows.
Hasbro Grows Profit, Sales
Hasbro (HAS 30.80) reported higher fourth quarter profits as sales growth and the benefit of foreign exchange boosted results.
Hasbro reported fourth quarter earnings of $1.09 per share, $0.28 better than the First Call consensus of $0.81.
Revenues rose 11.7% year-over-year to $1.38 billion; the consensus expected $1.34 billion. Excluding a $55.4 million positive impact from foreign exchange, revenues grew 7% in the quarter.
Hasbro said it believes it should be able to grow revenues and earnings per share for 2010, but did not give specific forecasts.
CVS Caremark Beats Earnings Estimate
CVS Caremark (CVS 31.07) reported earnings that topped the consensus estimate for its fourth quarter while revenues rose from the prior year but failed to meet the consensus estimate.
CVS reported fourth quarter earnings of $0.79 per share, excluding nonrecurring items and including a $0.01 tax benefit. The results were $0.01 better than the First Call consensus of $0.78.
Revenues rose 7.0% year-over-year to $25.82 billion, shy of the $26.22 billion consensus. Revenues in the pharmacy services segment increased 14.5% to $13.5 billion in the fourth quarter of 2009. Adjusting the growth rate for the impact of new generics, net revenues would have grown 18.3% in the pharmacy services segment.
Pharmacy same-store sales rose 7.3% in the quarter and were negatively impacted by approximately 290 basis points due to recent generic introductions. Front store same-store sales increased 0.3%.
Shares of CVS have dropped 3.5% year-to-date but are moving about 2.7% higher ahead of Monday's opening bell.
Feeds!